Galston Still Saying The Rich Earning Too Much Money To Carry Tax Burden

May 16, 2011

It is absolutely true, as Jonathan Chait has argued, that the average tax rate for the wealthy declined as the Bush cuts kicked in, and there’s both reason and opportunity to push it back up. (I never suggested otherwise.) But as the tables below show, the larger truth (and problem) is that everyone’s average rate has declined since 2000, rates at the bottom and in the middle fell more (in percentage terms) than did those at the top, and the share of taxes paid by the wealthy has actually increased.

The point about everybody, not just the rich, enjoying lower tax rates is pertinent. But then Galston returns to his point about the rich paying a growing share of the tax burden. Again, that is more than 100% a phenomenon of the rich obtaining a growing share of the income pie. Over the last three decades, the highest-earning 1% have paid a lower tax rate while earning a much higher proportion of income.

Since the latter factor has grown more faster than the former, the rich are paying a bigger share of the tax burden. But to site this as an argument against concentrating the burden of higher taxes on the rich is perverse. It is like saying that we can't raise taxes only on the rich because they're earning too large a share of total income. In fact, it's not just like saying that, it is saying that, only hiding that claim in the epiphenomenon of the rich remitting more taxes as a result of their exploding income share.